Fiat Spa Current Issues Essay

Submitted By suryastudy
Words: 769
Pages: 4
Open Document
Current Issues andAffairs on Fiat

Fiat Stock Rises on Bank Talks to Finance Chrysler Deal
By Tommaso Ebhardt - May 31, 2013 3:55 PM GMT * Facebook Share * Tweet * LinkedIn * Google +1 * 0 COMMENTS * * Print * QUEUE
Q
Fiat SpA (F) rose to the highest in almost 22 months as investors see a merger approaching of the Italian carmaker with its Chrysler Group LLC unit amid talks with banks for as much as $10 billion in funding for the deal.
Fiat jumped as much as 3.5 percent to 6.14 euros, the first time the price has exceeded 6 euros since Aug. 4, 2011, and was trading up 3.1 percent at 4:52 p.m. in Milan, the best performance on Italy’s benchmark FTSEMIB Index. (FTSEMIB) Volume exceeded the three-month daily average by 68 percent. The stock’s 61 percent gain this year is the biggest on the eight-company Bloomberg Europe Autos Index, valuing Fiat at 7.65 billion euros ($9.91 billion).
Bank of America Corp., Deutsche Bank AG, Goldman Sachs Group Inc. and BNP Paribas SA (BNP) are among institutions discussing lending Turin-based Fiat the money to buy the 41.5 percent of Auburn Hills, Michigan-based Chrysler held by the United Auto Workers’ retiree health-care trust, people familiar with the matter said May 29. A merger is a key step in efforts by Sergio Marchionne, who runs both carmakers, to create a manufacturer with the scale to compete with industry leaders Toyota Motor Corp. (7203), General Motors Co. (GM) andVolkswagen AG. (VOW)
“Marchionne’s plan looks reachable, so we expect the stock to rise also in the medium term,” said Vincenzo Longo, an analyst at IG Group in Milan.
Marchionne’s Target
Fiat has accumulated a 58.5 percent holding since taking control of Chrysler in 2009 as the U.S. company emerged from bankruptcy. Marchionne has a target of completing the purchase of the remaining stake by the end of the summer, the people said. Other banks could also take part in the financing, one of the people said.
A merger would create a manufacturer grouping the mass-market Fiat, Chrysler, Jeep and Dodge auto brands with the Maserati and Ferrari supercar marques. Fiat will probably wait for a ruling in a legal dispute with the health-care trust over the value of the labor group’s Chrysler stake before moving forward, Chairman John Elkann said yesterday at the annual shareholders meeting of Fiat’s dominant shareholder, Exor SpA.
Fiat has received oral agreements at this point from some of the banks, while no final deal has been signed, the people said. Representatives for Fiat and the four banks declined to comment.
Phased Transaction
The Italian carmaker plans a two-step transaction, first buying the trust’s stake, and later refinancing the debt of both manufacturers at lower interest rates, the people said. Fiat may pay as much as $3.5 billion for the rest of Chrysler, UBS AG estimates. The two carmakers had 7.1
Show More

Related Documents: Fiat Spa Current Issues Essay

would you buy Gm? Essay

pattern of decisions deployed within the following functional strategies - Marketing strategy General Motors, under siege for the recall of 2.6 million small cars with defective ignition switches, will not change the strategy for selling its current lineup of new cars and trucks. The recall, which began in February and was expanded last month, is the company's largest crisis since it emerged from bankruptcy in 2009. While GM's U.S. market share has declined 2.3% for the first three months of…

Words 4615 - Pages 19

Notes On Economics

quantities that can be produced with existing resources - any point inside the PPC shows that the resources are not efficiently used or there is environmental problems - any point outside the PPC is just a future goal that cannot be achieved with current/existing resources PPC Shape - concave the opportunity cost increases with every extra unit produced (increasing quantities of the other products have to be sacrificed) - straight if the opportunity cost is equal A. Economic Systems a set of…

Words 8231 - Pages 33